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Patent trolls come under US antitrust authority scrutiny

The US Department of Justice (DoJ) and US Federal Trade Commission (FTC) are opening informal hearings next month which will look into the question of whether specialised patent-holding firms, also known as "patent trolls" to many, are disrupting competition in technology markets. Concerns that non-practising entities (NPEs) – companies that hold patents but do not make use of them – cause problems in the market have existed for some time. The traditional "troll", a small company holding a handful of patents, has in recent years been joined by the huge patent-holding corporations who buy up hundreds of patents. The aim of the NPEs is to get licence revenue from companies who they claim are infringing the patents they hold.

With numerous patents in the hands of NPEs that could be used against developers of open source or free software, the "troll" problem is one that has concerned the community for many years. It has also led to the creation of organisations such as Open Invention Network, a group which acquires patents and re-licenses them to members after they agree not to sue other Linux-using companies.

The informal hearings will begin with a 10 December session; Cisco, Nokia and Intellectual Ventures Management (a massive patent holding firm founded by former Microsoft CTO Nathan Myhrvold) have said they will be participating. According to the Wall Street Journal, a second session is already being planned. The hearings are part of a wider review of how holders of patents are using them as strategic weapons against competitors, with special emphasis on patents embedded in standards. The issues are complicated by companies colluding to created NPEs to which they assign their patents and which then sue the original companies' competitors for patent infringement.